Japan's economy joins Germany and France and emerges out of its recession on rebounding exports and consumer spending.

  • The second biggest economy expanded its GDP at an annual 3.7% in the second quarter, marking the first growth in five quarters.  Positive GDP is good but Japan missed analysts' estimates of 3.9% spurring concerns that growth will falter once the governments worldwide complete $2 trillion in stimulus spending.
  • Unemployment in Japan is reaching a record high as companies continue to drop jobs to cut costs.  Starting off this week in the Asian session, risk aversion takes first seat as Asian stocks extended a global decline.  The yen is being bought and higher yielding currencies are being sold off.  The yen rose to a two-week high against the euro and the most against the Australian and New Zealand dollars.
  • US regulators closed down five lenders, bringing the total number of failed banks to 77 this year.  The US dollar gained for a second day against the sterling on a report that showed British home sellers lowered the average asking prices by 2.2%, the most in eight months.
  • The euro may hold off losses today on speculation that a German report tomorrow will show investor confidence rose.  Expectations for the German ZEW Economic Sentiment are to rise to 45 from the previous month's reading at 39.5.
  • Crude oil collapsed well below $70 a barrel losing 4% on Friday after a surprise decline in US consumer confidence, rising stockpiles and reduced demand.  WTI continued its decline this week and as of 06:30 GMT Oil is trading below $66.50 a barrel.

Currency to watch out for: EURUSD & USDJPY

  • The EURUSD pivot point is at 1.4210 with a preference to enter into short positions at 1.4200
  • The USDJPY pivot point is at 95.00 with a preference to enter into short positions at 94.95

Today's calendar and market movers:

  • Switzerland retail sales year on year expected to rise to 0.8%
  • New York Fed Manufacturing Index expected to rise to 2.5
  • US NAHB Housing Market Index expected to rise to 18

Stocks:

  • US stocks fell broadly on Friday breaking a four-week winning steak after a weaker US consumer sentiment raises fears that consumer spending will hinder an early economic recovery.
  • As of 06:30 GMT the Nikkei is trading at -3.1% and the Hang Seng at -2.6%.